Human capital portfolios
AbstractThis paper assesses the trade-off between acquiring specialized skills targeted for a particular occupation and acquiring a package of skills that diversifies risk across occupations. Individual-level data on college credits across subjects and labor-market dynamics reveal that diversification generates higher income growth for individuals who switch occupations whereas specialization benefits those who stick with one type of job. A human capital portfolio choice problem featuring skills, abilities, and uncertain labor outcomes replicates this general pattern and generate a sizable amount of inequality. Policy experiments illustrate that forced specialization generates lower average income growth and lower turnover, but also lower inequality.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Federal Reserve Bank of Atlanta in its series Working Paper with number 2012-03.
Date of creation: 2012
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-21 (All new papers)
- NEP-DGE-2012-03-21 (Dynamic General Equilibrium)
- NEP-HRM-2012-03-21 (Human Capital & Human Resource Management)
- NEP-LAB-2012-03-21 (Labour Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gueorgui Kambourov & Iourii Manovskii, 2009.
"Occupational Mobility and Wage Inequality,"
Review of Economic Studies,
Oxford University Press, vol. 76(2), pages 731-759.
- Philipp Kircher & Iourii Manovski & Fane Nadja Groes, 2009. "The U-Shapes of Occupational Mobility," 2009 Meeting Papers 26, Society for Economic Dynamics.
- Schoellman, Todd, 2009.
"The Occupations and Human Capital of U.S. Immigrants,"
14236, University Library of Munich, Germany.
- Todd Schoellman, 2010. "The Occupations and Human Capital of U.S. Immigrants," Journal of Human Capital, University of Chicago Press, vol. 4(1), pages 1-34.
- Todd Schoellman, 2009. "The Occupations and Human Capital of U.S. Immigrants," EERI Research Paper Series EERI_RP_2009_19, Economics and Econometrics Research Institute (EERI), Brussels.
- Christina Gathmann & Uta Schönberg, 2010.
"How General Is Human Capital? A Task-Based Approach,"
Journal of Labor Economics,
University of Chicago Press, vol. 28(1), pages 1-49, 01.
- Gathmann, Christina & Schönberg, Uta, 2007. "How General Is Human Capital? A Task-Based Approach," IZA Discussion Papers 3067, Institute for the Study of Labor (IZA).
- Gervais, Martin & Livshits, Igor & Meh, Césaire, 2008.
"Uncertainty and the specificity of human capital,"
Journal of Economic Theory,
Elsevier, vol. 143(1), pages 469-498, November.
- Martin Gervais & Igor Livshits & Césaire Meh, 2007. "Uncertainty and the Specificity of Human Capital," Working Papers 07-57, Bank of Canada.
- Gervais, Martin & Livshits, Igor & Meh, Cesaire, 2007. "Uncertainty and the specificity of human capital," Discussion Paper Series In Economics And Econometrics 0713, Economics Division, School of Social Sciences, University of Southampton.
- Shintaro Yamaguchi, 2011.
"Tasks and Heterogeneous Human Capital,"
Department of Economics Working Papers
2011-06, McMaster University.
- Theodore Papageorgiou, 2011. "Worker Sorting and Agglomeration Economies," 2011 Meeting Papers 660, Society for Economic Dynamics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Meredith Rector).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.